Rivian Automotive Downgrade

by Warren Seah

The recent fourth-quarter earnings report from Rivian Automotive has led to a series of downgrades from analysts, causing concern among investors.

Double Downgrade by UBS Analyst

UBS analyst Joe Spak made a significant move by downgrading Rivian shares from Buy to Sell in one go, which is rare on Wall Street. This decision reflects the changing landscape of the electric vehicle (EV) market and its impact on Rivian.

Lowered Delivery Expectations

Spak now anticipates Rivian’s 2025 deliveries to reach around 75,000 units, compared to the Wall Street consensus of 95,000. He also slashed his price target for Rivian stock to $8 from the previous $24.

Market Reaction

Following the downgrade, Rivian stock experienced a 2.7% drop in premarket trading on Friday morning, settling at $11.14 per share. This decline followed a significant 26% drop in Thursday’s trading after the earnings report was released.

Analyst Sentiment

J.P. Morgan analyst Ryan Brinkman also downgraded Rivian shares to Hold from Buy, setting a new price target of $11 per share. Currently, 57% of analysts covering Rivian rate the stock as Buy, slightly below the average Buy-rating ratio for S&P 500 stocks.

Future Prospects

Despite the recent challenges, analysts remain cautiously optimistic about Rivian’s future, with an average price target of approximately $19.30 per share. This marks a decline from the previous average target of nearly $25 per share.

In conclusion, Rivian Automotive faces a challenging road ahead as it navigates changing market dynamics and investor expectations.

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